Diageo Not Phased by Slowdown in US Economy

Dear Client:Despite a tough fourth quarter for the US economy, Diageo's first half results ending December 31 remained solid. Albeit a bit moderate, US sales growth of 5% was driven by 1% volume growth, 2%-3% average price increases for spirits, and innovation. As a result, mix was up about 4%. Larry Schwartz, president of Diageo North America, said December was the only month where sales saw an "interruption" due to Hurricane Sandy, the Fiscal Cliff etc. "But we don't see